Semiparametric Estimation in Models of First-Price, Sealed-Bid Auctions with Affiliation

Timothy Hubbard, Tong Li and Harry Paarsch

No 2010-10, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: Within the affiliated private-values paradigm, we develop a tractable empirical model of equilibrium behaviour at first-price, sealed-bid auctions. The model is non-parametrically identified, but the rate of convergence in estimation is slow when the number of bidders is even moderately large, so we develop a semiparametric estimation strategy, focusing on the Archimedean family of copulae and implementing this framework using particular members--the Clayton, Frank, and Gumbel copulae. We apply our framework to data from low-price, sealed-bid auctions used by the Michigan Department of Transportation to procure road-resurfacing services, rejecting the hypothesis of independence and finding significant (and high) affiliation in cost signals.

Keywords: first-price; sealed-bid auctions; copulae; affiliation (search for similar items in EconPapers)
JEL-codes: C20 D44 L1 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2011-01
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29197/wp2010-10.pdf

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Journal Article: Semiparametric estimation in models of first-price, sealed-bid auctions with affiliation (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2010-10

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